Machine Tool Makers Have to Develop Own NCs for Free-Tariff Export to China From 2014

Taipei, Dec. 28, 2010 (CENS)--Taiwan-made machine tools will lose free-tariff status for export to the Chinese market from 2014 unless those products are equipped with numerical controllers made in Taiwan or mainland China, according to the special rules on place of origin for items on the early-harvest list of the Cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA), publicized yesterday (Dec. 27).

As a result, local machine-tool makers will have to shed their reliance on Japanese or Germany suppliers and develop their own numerical controllers, in order to retain their free-tariff status and safeguard their market share in China. Machine tool is the only item on the early-harvest list inflicted with the condition.

The requirement is applicable to all Taiwan-made machine tools on the early-harvest list, including metal-cutting NC drilling machine and grinding machine, except NC lathe, which is afforded a two-year grace period, with the deadline extended to 2016. At present, those products only have to meet the condition of 50% local contents rate (or added-value rate).

In fact, the condition of local-contents rate is applicable to most items on the early-harvest list, ranging 40-50%, higher than the common level of 35%.